Ed Millie gives some tips.

Ed Millie gives some tips.

Hard-bitten human resources managers will say "you can't stop staff taking you on". There is some truth in this. Dismissed and aggrieved employees may well convince themselves that the real reason for their downfall was sex or race discrimination, where a claim can be made without them even starting work. Most employment tribunal actions never reach a hearing. Around half are settled by the employer, often calculating that the cost of defending a case is greater than the cost of settling, whatever the merits. These costs include

  • direct costs of legal representation, management time and the potential loss of the case
  • indirect costs of lost productivity, adverse consequences of (internal) publicity and tensions associated with employees appearing as witnesses

    Despite headlines of six figure awards, reality is usually less exciting. The average tribunal award is a few thousand, and employers win in about 50% of cases. For most, nuisance, reputation and costs are more significant than penalties. There are two complementary ways to minimise risk of legal action by employees and ex-employees. The first is to implement the basic, effective policies. The second is to build on these, so that employees can work with you towards a good working environment, rather than focusing on their "rights".

    The basics - good practice
    If managers don't know what is expected of them, there will be I costly mistakes.

  • Successfully defending an unfair dismissal claim requires demonstrating a good reason for dismissal and a fair process for investigation, hearing and decision. Catching someone "red handed" is not good enough if they are then not given an opportunity to be accompanied (by a workplace colleague or trade union officer) to a disciplinary hearing, or where an appeal is not heard by a more senior (and independent) manager than the one who took the dismissal decision.
  • Where an office is closing and jobs are redundant, it may seem kindest just to tell staff they are out of a job. But no consultation equals unfair.
  • If you recruit using written selection tests, a partially sighted applicant may not be able to complete them, while someone who scores very well is offered the job - another potential claim.

    Assess and plan
    Mistakes happen in a crisis, so use Rachel Dineley's checklist of legal requirements to think through - and document as policies or processes - the "what and how" of your business response. If you receive a complaint of sexual harassment, and have no clear policy on how to handle it, consider yourself in trouble!

    Having a policy is not enough. Tribunals are quick to establish reality. Was the policy communicated, embedded in training, and monitored? There is no point in producing a splendidly detailed policy at a tribunal hearing if the relevant manager has never seen or understood it, and was allowed to take decisions without proper training.

    Well-intentioned (and even well implemented) personnel practices fade with time. A major client recently conducted a survey of all staff to see whether - a year after implementation - a new harassment and bullying policy had been understood and followed. Results were generally good, but identified a few areas where the company was vulnerable.

    Positive people culture
    Employment risks can easily focus only on the negative - disputes rather than risk reduction. Trying to make sure you are in the right is not enough. Indeed, you "can't stop them taking you on", but you can create an environment where disputes are far less likely.

    The optimum situation is one where employees are working with you to achieve a good employment culture. The benefits really are win-win

  • risk avoidance: - employees recognise and take action on potential problems
  • perceived professionalism of employment practices: motivates employees and discourages both claims and managerial shortcuts
  • image of a quality employer:- improving both retention and recruitment


  • Communication
    Company newsletters, intranet information and handbooks are all useful. In particular, induction training (and clearly explaining responsibilities on appointment/promotion) is key.

  • Be seen to take it seriously
    Communications should be under the name of a senior director.

  • Maintain a high profile and monitor
    There is nothing like an employee survey (a sample is fine) to validate understanding and communication.

  • Provide effective and secure feedback channels
    For instance, most grievance procedures require an employee to raise the issue first with the immediate manager. However, most bullying or harassment is by the immediate manager! Make sure there is a separate route for complaints about managers.

  • Look at good practice and a positive culture, and have the following on your list of major opportunities to reduce the most expensive employment risks:

    • confused contractual status of bonus and commission schemes - are they a right or at employer discretion? A recent high court case found in favour of a City trader.
    • in a desperately competitive employment market, turnover, recruitment difficulties and skills shortages seriously damage the business. Good staff can choose where they work - a quality people culture pays dividends.
    • promotion and equal pay.

  • Harassment and bullying.
    Get in first with clear and supported processes.

  • Stress (at work) related illness.
    Above all, ensure that there is a full assessment of the working environment when the employee returns. A repetition of the illness is a potential six-figure award.

  • E-mail and internet monitoring.
    A legal nightmare. If you monitor, tell staff, including why, how, for what, the rules and the consequences Internet pornography is a massive problem for employers, good tabloid material, and a horror to address in a policy vacuum.
    Ed Millie is managing partner of HR Consulting Associates, Tel: 01344 762992, e-mail: ed.millie@hr-consulting.co.uk

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